“We don't control the daily movement of prices. But as a policy decision, we have decided that we wouldn't be paying fuel subsidy. The policy remains."

Nigeria’s Minister of Budget and Economic Planning, Atiku Bagudu, has maintained that the Bola Tinubu administration has scrapped subsidy on petrol.

When asked to be categorical about whether the government still pays subsidy on petrol, contrary to President Tinubu’s statement at his inauguration last May, Mr Bagudu said “No” and explained that there was no provision for such.

The minister spoke in an interview with PREMIUM TIMES last month, published on Sunday.

He referred to the Petroleum Industry Act which gave autonomy to the state-owned oil company, NNPCL, as well as the policy decision of the Tinubu administration not to pay subsidy on petrol.


There is a “public policy decision, rightly, commendably and boldly, that we can’t as a nation afford fuel subsidy,” he said.

“The policy has been effected and is still being effected. But sometimes people are confusing the two elements.

“Many people are confusing price movements and the policy decisions. Our policy on fuel subsidy stands. But we don’t control the daily movement of prices.”

The minister’s recent comment throws more controversies on petrol subsidies in Africa’s largest country.

While the minister insisted the Nigerian government is not paying subsidies on petrol, the International Monetary Fund said on Thursday that the Nigerian government reintroduced petrol subsidy at the end of last year.

The IMF said subsidy payment is expected to gulp almost half of Nigeria’s projected oil revenue this year.

The implicit subsidy will cost Africa’s largest crude producer an estimated N8.43 trillion of its projected N17.7 trillion of oil revenue, the IMF said in a report published on Thursday.

Its forecasts are similar to Bank of America’s, which projects it could cost Nigeria between $7 billion and $10 billion this year if it imports between 18 and 25 billion litres of gasoline, Bloomberg reported, quoting a note from Tatonga Rusike, BofA sub-Saharan Africa economist.

In April, a former governor of Kaduna State, Nasir El-Rufai, said whether the government admits it or not, the landing cost of petrol shows that there is a form of subsidy being paid.

Currently, the NNPCL is the sole importer of petrol used by millions of Nigerians to power their vehicles and generate electricity. The NNPCL, Nigeria’s highest revenue-generating agency, is believed to be using its resources to maintain the price of petrol below N700 per litre despite a landing cost of about N1,000, implicitly subsidising the product for Nigerians.

But Mr Bagudu said the removal of petrol subsidy as announced by the president remains. “That I removed the subsidy does not mean prices of petroleum will change on a daily basis,” he told PREMIUM TIMES. “Because, even airlines that many of us are privileged to use occasionally or big transportation companies, their fuel cost does not change in the day, but it’s an average.”

“We don’t control the daily movement of prices. But as a policy decision, we have decided that we wouldn’t be paying fuel subsidy. The policy remains.”

Mr Bagudu reiterated his position on subsidy removal in a separate interview with the Nigeria Television Authority (NTA).


He said although the removal of petrol subsidy caused some pains, the policy increased the funds available to the three tiers of government to invest in critical infrastructure that would regenerate the economy, explaining that before 29 May 2023, the finances of the government were fragile.


“The payment of subsidies affected the quantum of revenue available to all the layers of government so much so that the economy was at a standstill,” the minister was quoted as saying by his spokesperson in the interview aired over the weekend.

In his inaugural speech last May, President Tinubu said: “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care, and jobs that will materially improve the lives of millions. Petrol subsidy is gone.”

The president’s announcement sparked the increase in fuel price from N197 to between N480 and N570. The pump price was subsequently reviewed upward to N617/litre and now sells for between N620 and N700/litre.

The IMF had recommended removing fuel subsidies through the introduction of a market-based pricing mechanism, combined with adequate compensatory measures for the poor and efficient and transparent use of the saved resources.

In its report, the financial body noted that fuel subsidies were reformed in June 2023, however, adequate compensatory measures for the poor were not scaled up in a timely manner and subsequently paused over corruption concerns.

“The devaluation of the naira days later, which was aimed at creating a free-floating currency, led fuel prices to more than triple, fanning inflation and protests,” the report said.

“To help Nigerians cope, authorities started capping fuel pump prices below cost, reintroducing implicit subsidies by end-2023,” the IMF concluded.

https://www.premiumtimesng.com/news/top-news/693595-ministers-comments-worsen-controversy-on-nigerias-petrol-subsidy-removal.html

This Abacha looter , he is probably looting the subsidy money with thiefunbu

Liars

The foolishness of the govt is them trying to deny the claims of those they run to to collect loans. The same people who have all their details and earnings

All this ministers are fools especially that one in charge of power and electricity or so, they reason with their life like every citizens lives like them

Thïefnubu is CornFused. 😂

Government of retrogression

Nobody can tell this Tinubu and appointees ain't confused,,is this how you met the country?you're all a disappointed

E